On the Existence of Equilibria in Discontinuous Games: Three Counterexamples
We study whether we can weaken the conditions given in Reny (1999) and still obtain existence of pure strategy Nash equilibria in quasiconcave normal form games, or, at least, existence of pure strategy $\varepsilon-$equilibria for all epsilon>0. We show by examples that there are: (1) quasiconcave, payoff secure games without pure strategy epsilon-equilibria for small enough epsilon>0 (and hence, without pure strategy Nash equilibria), (2) quasiconcave, reciprocally upper semicontinuous games without pure strategy epsilon-equilibria for small enough epsilon>0, and (3) payoff secure games whose mixed extension is not payoff secure. The last example, due to Sion and Wolfe (1957), also shows that non-quasiconcave games that are payoff secure and reciprocally upper semicontinuous may fail to have mixed strategy equilibria.
|Date of creation:||09 Feb 2004|
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- Partha Dasgupta & Eric Maskin, 1986. "The Existence of Equilibrium in Discontinuous Economic Games, I: Theory," Review of Economic Studies, Oxford University Press, vol. 53(1), pages 1-26.
- Philip J. Reny, 1999. "On the Existence of Pure and Mixed Strategy Nash Equilibria in Discontinuous Games," Econometrica, Econometric Society, vol. 67(5), pages 1029-1056, September.
- Leo K. Simon, 1987. "Games with Discontinuous Payoffs," Review of Economic Studies, Oxford University Press, vol. 54(4), pages 569-597.
- Michael R. Baye & Guoqiang Tian & Jianxin Zhou, 1993. "Characterizations of the Existence of Equilibria in Games with Discontinuous and Non-quasiconcave Payoffs," Review of Economic Studies, Oxford University Press, vol. 60(4), pages 935-948.